Court showdown looms over South Africa grants payments crisis

Reuters Staff

2 Min Read

JOHANNESBURG, March 15 (Reuters) - South Africa’s highest court will hear an application on Wednesday seeking to have it take oversight of a renewed contract that must be clinched before Thursday to ensure welfare grants are paid on time in April to 17 million people.

The existing contract, run by Cash Paymaster Services (CPS), a unit of technology company Net1 unit, has been shrouded in doubt since the Constitutional Court ruled in 2014 that the tender process to acquire its services was unlawful.

The government’s South African Social Security Agency (SASSA) was supposed to have taken over the responsibility to make the social service payments or find an alternative pay service on April 1 but failed to do so, leaving the state with little choice but to allow CPS to continue.

CPS chief executive Serge Belamant was quoted as saying in several local media outlets that for logistical reasons, a new contract needed to be signed on Wednesday, or else it would not be able to make payments on time on April 1, dramatically raising the stakes in the game.

Officials at SASSA have said the agency has opted to renew the deal with Cash Paymaster Services despite the court order. A new deal has not yet been made public.

Dominated by more than 11 million child support grants, the welfare system is a lifeline for South Africa’s most vulnerable. Each month long queues form at pay points across the country as people wait for the money that is often the difference between going to bed hungry or not.

Facing a hostile opposition in parliament on Tuesday, Social Development Minister Bathabile Dlamini said there was no crisis. Finance Minister Pravin Gordhan also said on Tuesday he was confident the grants will be paid on April 1. (Reporting by Ed Stoddard; Editing by James Macharia)